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United States General Accounting Office

GAO Report to Congressional Requesters

April 1999 COMMUNITYDEVELOPMENT

Extent of FederalInfluence on “UrbanSprawl” Is Unclear

GAO/RCED-99-87

GAO United States

General Accounting Office

Washington, D.C. 20548

Resources, Community, and

Economic Development Division

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April 30, 1999

The Honorable James M. JeffordsUnited States Senate

The Honorable Carl LevinUnited States Senate

The Honorable Diana L. DeGetteHouse of Representatives

The Honorable Max S. BaucusRanking Minority MemberCommittee on Environment and Public WorksUnited States Senate

After World War II, people began moving in large numbers from thecentral cities to the suburbs. By 1950, the rate of growth nationally was 10times higher in the suburbs than in the central cities, and by 1970, theUnited States, for the first time in history, counted more suburbanites thancity dwellers or farmers. These demographic changes were accompanied,on the one hand, by an increase in homeownership and opportunities fornew businesses and, on the other hand, by the sprawling, low-density,fragmented, automobile-dependent development that is commonlyreferred to as “urban sprawl.”1

Concerned about the contribution of federal programs and policies to“urban sprawl” while recognizing that land-use planning has traditionallybeen a function of state and local governments, you asked us to (1) reviewresearch on the origins and implications of “urban sprawl,” (2) describethe evidence that exists on the influence of current federal programs andpolicies on “urban sprawl,” and (3) identify regulatory review andcoordination mechanisms evaluating and mitigating the effects of federalactions on “urban sprawl.” This report, the first of a series examining theimplications of federal policies on negative patterns of growth, is based ona review of research and discussions with experts in the public, private,and educational communities on growth-related issues. We did notindependently assess the validity of the research. We focused on specificfederal programs and policies, including those reflecting decisions on

1The term “urban sprawl” is, in our view, the clearest of the alternatives we considered using in thisreport to refer to outward growth. Therefore, despite its negative connotations, we decided to use theterm.

GAO/RCED-99-87 Research on “Urban Sprawl”Page 1

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spending, taxation, regulation, and the location of federal facilities.Information about each program and policy we reviewed appears inappendix I.

Results in Brief The growth of suburbs outside central cities, which accelerated afterWorld War II, had both positive and negative effects, according to theresearch we reviewed. Suburban growth began in response to a number ofsocial, economic, demographic, and technological factors, including thepostwar population boom; the increased availability of suburban housing;and the greater use of passenger cars, which allowed greater access tosuburban areas. Historically, federal housing and highway programscontributed to suburban growth because the availability of housing loansfacilitated suburban homeownership and federal highway spendingfinanced the expansion of highways that gave consumers access tosuburban locations. When suburban growth means the rapid spread offragmented, low-density, automobile-dependent development on thefringes of cities, some observers see such growth as “urban sprawl.”Despite many studies on the costs and implications of “urban sprawl,” somany factors contribute to it and the relationships among these factors areso complex that researchers have had great difficulty isolating the impactof individual factors. As a result, researchers have generally been unableto assign a cost or level of influence to individual factors, includingparticular federal programs or policies. Research has identified positiveeffects of “urban sprawl,” such as increased homeownership and new,sometimes lower-cost locations for businesses. At the same time, researchpoints to negative effects, such as higher infrastructure costs inlow-density areas, increased traffic congestion, and reduced green space.

Some experts believe—and anecdotal evidence exists to support theirbelief—that the federal government currently influences “urban sprawl”through spending for specific programs, taxation, and regulation, amongother things, but few studies document the extent of the federal influence.According to some experts, the role of federal programs and policiesoccurs in combination with a number of factors, including market forcesand local land-use decisions. Studies that attempt to quantify the linkbetween highway spending and “urban sprawl,” for example,acknowledge the difficulty in isolating the influence of highway spendingfrom that of other factors, such as market influences. For instance, a 1995Transportation Research Board report states that transportationinvestments influence the location of growth but do not alone cause


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growth.2 Anecdotal evidence suggests that investment in water and sewersystems may lead to residential and commercial growth in outer areasbecause such investment facilitates development. We found littlequantitative research linking federal assistance for water and sewersystems with “urban sprawl.” Tax code provisions that subsidizehomeowners through the mortgage interest and property tax deductionsare believed by some researchers to provide an incentive for purchasingmore expensive housing that is sometimes located outside urban areas.The tax policy research we reviewed did not directly estimate the effectsof existing tax policies on “urban sprawl.” Local officials have suggestedthat federal regulations implementing the Clean Air Act encourageindustrial development in greenfields, rather than settled areas, becausethe act restricts emissions in areas that do not meet air qualitystandards—typically urban areas. However, studies indicate thatenvironmental regulations play a small role in decisions about the locationof businesses. The shortage of quantitative evidence does not mean thatfederal programs and policies do not have an impact on “urban sprawl;” itsimply means that the level of the federal influence is difficult todetermine.

Executive orders governing the federal regulatory review process do notdirectly address “urban sprawl,” but coordination among federal agencieson growth-related issues is increasing. Furthermore, the executive ordersestablish basic principles for agencies to follow when reviewing andapproving regulations, and specific laws, such as the NationalEnvironmental Policy Act and the Farmland Protection Policy Act, offerfederal agencies an opportunity to consider the potential influence of theiractions on growth. Federal agencies coordinate their activities primarily inspecific program areas, but coordination across agencies is increasing. Forexample, the President’s Council on Sustainable Development, a federaladvisory committee, was created in 1993 to address development andgrowth issues by encouraging policies to support collaboration amongfederal, state, and local government agencies; public interest andcommunity groups; and businesses. The Council issued a report in 1996that included goals and indicators for developing sustainable communities,such as decreasing traffic congestion and increasing urban green space.The Council plans to issue another report in the spring of 1999 presentingpolicy recommendations. In addition, the Environmental ProtectionAgency initiated a Smart Growth Network to share information amongfederal agencies and other interested parties on growth-related issues. At

2Expanding Metropolitan Highways: Implications for Air Quality and Energy Use, National ResearchCouncil, Transportation Research Board, Special Report 245 (1995).


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this time, coordination efforts are too new and the research is too limitedto determine how the federal government can better assist state and localgovernments in managing growth.

Background Several features of “urban sprawl” are widely recognized, but experts ongrowth management and related issues have not arrived at a commondefinition. Experts have difficulty agreeing on a definition because “urbansprawl” has frequently been described as being “in the eye of thebeholder.” Research often characterizes this form of growth aslow-density, auto-dependent development that rapidly spreads on thefringes of existing communities, often consuming agricultural andenvironmentally sensitive lands. Research also describes “urban sprawl”as random development characterized by poor accessibility among relatedland uses, such as housing, jobs, and services like schools and hospitals.Sprawling development can occur in rural and urban areas and canencompass residential, commercial, and industrial zones. Some researchalso makes a connection between “urban sprawl” and the declining fiscalcondition of central cities. Still other research shows that as the outerrings of suburbs have grown over time, the inner rings have sometimesbegun to decline, much as the central cities have done. As figure 1 shows,the percentage of people living outside the central city in the 10 largestU.S. metropolitan areas increased from about 40 percent in 1950 to about60 percent in 1990.


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Figure 1: Percentage of Population in10 Largest Metropolitan Areas, asDefined in 1990, Living Inside andOutside the Central City, 1950-90

Percent of population

0

20

40

60

80

100

1950 1960 1970 1980 1990Years

Inside central city

Outside central city

Notes: The 10 largest metropolitan areas in 1990 were the New York, Los Angeles, Chicago, SanFrancisco, Philadelphia, Detroit, Boston, Washington, D.C., Dallas, and Houston metropolitanareas. The metropolitan areas for each decade are considered on the basis of their geographyduring that decade.

Source: U.S. Bureau of the Census.

Since land-use planning is usually considered a state and localresponsibility, the federal government has had limited involvement inregulating land use. According to the literature, the federal governmenthas not adopted a comprehensive national growth plan or land-use policyto balance the nation’s competing needs for economic growth,environmental conservation, and urban reinvestment. However, thefederal government does influence land-use decisions through federallaws, such as the National Environmental Policy Act (NEPA), whichrequires federal agencies to prepare environmental impact statements, andfederal court decisions.


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The states have inherent powers to regulate land use and have generallydelegated certain authorities, including zoning, to local governments. Evenso, a state can influence how and where growth will occur by usingpermitting, funding, and construction decisions to encourage ordiscourage the reuse of existing infrastructure or the revitalization ofdowntown areas. At least 11 states have passed growth managementlegislation since 1985. Some of the legislation3 allows states and/or localgovernments to purchase lands to preserve farmland and naturalresources, provides financial incentives to encourage companies andindividuals to move to downtown areas, and restricts development tospecific areas.

The states generally confer primary authority for land-use decisions onlocal governments. Traditionally, local governments have used theirzoning authority to regulate land uses. More recently, some localgovernments have used impact fees and other techniques to managegrowth. Local governments are also participating in regional governancestructures and other types of partnerships to oversee land-use planningand influence the spending of resources.

Origins andImplications of“Urban Sprawl”

Suburban development evolved as a result of a combination of social,economic, demographic and technological factors. For example,innovations such as the automobile opened access to suburban areas, andnetworking and computers have made individuals and businesses moremobile. Some studies have identified the positive effects of suburbandevelopment—opportunities for homeownership and new, sometimeslower-cost locations for businesses—while others focus on the negativeeffects. Among those cited are the diversion of economic resources from,and the growth of poverty in, the central cities; the loss of green space andhigher public costs for infrastructure in the suburbs; and the steadyincrease in traffic congestion.

Several InterrelatedFactors Contributed to theOrigins of “Urban Sprawl”

America’s largest cities underwent dramatic demographic changes duringthe second half of this century. The literature cites a combination of social,economic, and demographic factors that historically contributed tosuburban growth and created a framework for the growth patterns thatcontinue today. For example, during the 1940s, city populations explodedas millions of people moved from rural areas to metropolitan areas

3For example, in 1997, Maryland passed legislation enacting the Rural Legacy Program, which isdesigned, among other things, to establish greenbelts of forests and farms around rural communitiesand preserve critical habitats for native plants and wildlife.


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seeking employment. By the 1950s, much of the housing in these cities wasold and overcrowded, and the country was experiencing a populationboom that, coupled with rapidly rising household incomes, intensified thedesires of many households to live in bigger homes on larger lots. By themid-1960s, an immense increase in housing and other constructionoccurred in suburban areas. According to researchers, the FederalHousing Administration’s (FHA) single-family homeownership programincreased the availability of long-term housing loans while the program’sstrict construction standards and requirement that neighborhoods behomogeneous (segregated) ensured that most FHA loans would be madefor homes in the suburbs. In addition, local governments contributed to“urban sprawl” by encouraging low-density development through zoninglaws and subdivision regulations.

During the 1950s and 1960s, two additional factors—the movement ofAfrican-Americans into formerly white city neighborhoods and, in somecities, court-ordered busing to achieve racial integration in the publicschools—caused many middle-class white families to move out from thecentral cities, according to the research. In some cities, the exodus of thewhite middle class was followed by the withdrawal of middle-classminority families and viable businesses. Concentrations of poverty andcrime rates increased, and the quality of the public schools declined. Someresearchers believe that this exodus may inadvertently have been givenadditional impetus by such federal programs as public housing, whichdestabilized many urban neighborhoods, removing older housing andreplacing it with cheaply constructed and poorly maintained publichousing developments inhabited by the poorest of the poor.

Technology has also played a unique role in facilitating suburbandevelopment by giving people more choice in where they live and work.Transportation innovations—beginning with the steam ferry, cable andhorse-drawn cars, commuter and elevated railroads, and the electricstreetcar—initially improved access to new towns surrounding large cities;this access accelerated greatly with the advent and increased use of theautomobile. Researchers have pointed to the historic role played byfederal highway subsidies in contributing to “urban sprawl.” Theconstruction of highways facilitated growth by providing access tosuburban areas. In addition, the mechanization of farm production ledindirectly to migration from rural to urban areas. More recently, hightechnology networks and machines, such as the Internet, computers,faxes, and cellular phones, have made both individuals and businessesmore mobile than ever before.


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Experts Cite Positiveand NegativeImplications of“Urban Sprawl”

Experts have identified both positive and negative implications of “urbansprawl.” On the positive side, according to experts, homeownership hasincreased because housing costs are lower in outer-ring suburbs;businesses have more, and sometimes cheaper, locations to choose from;and consumers may have access to lower prices at suburban discountstores. But experts also said that “urban sprawl” has diverted economicdevelopment from, and increased the concentration of poverty within, thecentral cities; reduced green space; increased the public costs of newinfrastructure in low-density areas; and increased traffic congestion.Appendix II provides a summary of the factors listed in a 1998 synthesis ofliterature on the topic4 and shows whether the studies agreed on whethereach factor exists and has been significantly linked to “urban sprawl.”

The costs associated with “urban sprawl” have also receivedconsiderable attention. For example, an Office of Technology Assessmentstudy examining the implications of technological changes in metropolitanareas analyzed whether “urban sprawl” pays its own way or is subsidized.5

The costs were divided into direct costs, such as on-site developmentcosts or the costs of neighborhood services available to new developmentsexclusively, and indirect costs, such as the impact of suburbandevelopment on air and water quality and the costs of travel. According tothe study, the research suggests that sprawling development “costs morethan compact development, and that some of that cost is subsidized.”Who actually pays for these subsidies is unclear. According to the study,the subsidies are sometimes a combination of local, state, and federalgovernment resources. In other cases, the costs are subsidized by centralcities or nearby, older suburbs that are experiencing the negativeimplications of “urban sprawl” themselves. A 1997 study on the costs andbenefits of “urban sprawl” concluded that under a scenario of controlledgrowth, citizens could reduce land consumption by 60 percent and roadbuilding by 25 percent.6 On the other hand, a 1990 study on growthmanagement noted that controls on local growth tend to increase housingprices.7 In addition, a 1998 study on how “urban sprawl” has affectedMichigan concluded that, in terms of costs, urbanization is not threatening

4Robert W. Burchell et al., Costs of Sprawl Revisited: The Evidence of Sprawl’s Negative and PositiveImpacts, National Research Council, Transportation Research Board (1998).

5The Technological Reshaping of Metropolitan America, Office of Technology Assessment(OTA-ETI-643, Sept. 1995).

6Robert W. Burchell, “Economic and Fiscal Costs (and Benefits) of Sprawl,” The Urban Lawyer(Spring 1997).

7Benjamin Chinitz, “Growth Management: Good for the Town, Bad for the Nation?” Journal of theAmerican Planning Association (Winter 1990), pp. 3-8.


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Michigan’s agricultural industry, the negative effects of development onlocal infrastructure costs are exaggerated, and higher residential densitiesmay increase pollution levels.8 Overall, however, so many factorscontribute to “urban sprawl” and are so closely interrelated thatresearchers have found it extremely difficult to isolate the cost orinfluence of individual factors—including those relating to federalprograms and policies.

Some Believe ThatSelected FederalPrograms and PoliciesInfluence “UrbanSprawl,” but theExtent of theInfluence Is Unclear

Some experts believe—and anecdotal evidence exists to support theirbelief—that the federal government influences “urban sprawl” throughspending, taxation, regulation, and decisions about the location of federalfacilities; however, limited data are available to document and quantify theextent of the federal influence. While one noted expert said that “therearen’t many federal policies that induce sprawl,” others believe that therole of federal programs and policies is more piecemeal and incremental innature, facilitating “urban sprawl” when combined with other factors,such as market forces and local zoning.9 Some information exists onwhere federal spending is occurring for highway and water and sewerprograms, but data are not always geographically specific enough tocapture spending in suburban areas, making it difficult to analyze thefederal influence. Few studies use quantitative data to demonstrate adirect link between “urban sprawl” and federal spending, exclusive ofother influences. The tax policy studies we reviewed do not directlyestimate whether tax policies, such as the home mortgage interestdeduction and property tax deductions for owner-occupied housing, affectthe direction and magnitude of “urban sprawl.” Local officials allege thatfederal regulations implementing the Clean Air Act contribute to “urbansprawl,” but a body of quantitative evidence indicates that environmentalregulations play a small role in businesses’ decisions about where tolocate. Some experts believe that the location of federal and postalfacilities plays a significant role in “urban sprawl;” however, studies havenot been conducted to show the impact of the location of federal andpostal facilities on “urban sprawl.”

8Samuel R. Staley, “Urban Sprawl” and the Michigan Landscape: A Market-Oriented Approach,Mackinac Center for Public Policy (Oct. 1998).

9Growth Management Planning and Research Clearinghouse, U. of Washington, A Literature Review ofCommunity Impacts and Costs of Urban Sprawl, National Trust for Historic Preservation (Sept. 1993),p. 47.


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The Impact of FederalSpending Programson “Urban Sprawl”Varies

Experts and much of the research agree that federal spending by theDepartment of Transportation for the Interstate Highway System—incombination with other factors such as population growth, rising personalincomes, and increased automobile ownership—supported the expansionof metropolitan areas by improving access to suburban locations. Forexample, a Transportation Research Board study identified evidenceindicating that funding for the Interstate Highway System improved accessto developable land on the fringes of urban areas, thus supportinglow-density development.10 Another Transportation Research Board reportnoted that highway access, though necessary to support decentralization,is not the only factor responsible for growth.11 The Federal HighwayAdministration collects federal highway obligation data by type of highwayimprovement, but these data are not detailed enough to distinguish overallspending in suburban areas from spending in urban areas. FederalHighway Administration officials said their reporting system reflectsfederal spending by the legislated federal-aid designations—rural, urban,small urban, and urbanized—and cannot identify spending in suburbanareas because suburban development can occur in any of the populationareas. Federal highway data show that the federal share of highway capitaloutlays has been between 41 and 46 percent since 1987, but FederalHighway Administration officials emphasize that almost all highwayprojects are selected by state and local decisionmakers. Also, according toFederal Highway Administration officials, the 1998 Transportation EquityAct for the 21st Century increased metropolitan planning organizations’already high level of flexibility to fund transportation projects that bestmeet locally determined goals.

Anecdotal evidence suggests that investments in water and sewer systemslead to residential and commercial growth in outer areas because theseinvestments facilitate development. However, we found little researchlinking the federal assistance provided through the eight major federalwater and sewer programs that we reviewed to “urban sprawl.”12 We didfind analyses that related federal spending for water and sewer systems toeconomic growth, but not to “urban sprawl” specifically. In addition,some federal agency staff said that their programs had a past or presentinfluence on growth, while other officials said that water or sewer projectsallow for future population growth. The five federal agencies that

10Consequences of the Development of the Interstate Highway System for Transit, National ResearchCouncil, Transportation Research Board, Research Results Digest No. 21 (Aug. 1997).

11See footnote 2.

12See app. I for more information on the programs and our criteria for selecting them.


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administer the eight programs we reviewed maintain varying types ofspending data for their programs, making it difficult to summarize thedistribution of federal funding for these programs geographically or by thetype of construction (new versus upgrade).

Historically, researchers have cited FHA’s single-family homeownershipprogram as contributing to “urban sprawl” through its strict constructionand design standards and its requirement that neighborhoods behomogeneous, which ensured that most FHA loans would be made forhomes located in the suburbs. We did not find any recent researchshowing that the single-family housing program encourages housingdevelopment in suburban areas over central cities. The goal of FHA’scurrent single-family mortgage insurance program is to increasehomeownership regardless of the location of the home. In light of thisfocus, FHA’s single-family mortgage insurance program is an important toolto help first-time buyers attain homeownership and to encouragehomeownership in underserved areas.13 According to a Department ofHousing and Urban Development (HUD) publication based on 1996 HomeMortgage Disclosure Act data, 46 percent of FHA’s loans were made incentral cities while 37 percent of the conforming conventional market’sloans were for central city properties.14

Some researchers have described the historic contribution of federalpublic housing policies to the concentration of poverty in central citiesand the movement of the middle class to suburban areas. To counteractpoverty in central cities and give low-income renters mobility, theCongress established the Section 8 voucher and certificate programs toprovide tenant-based rental assistance. Using a voucher or certificate, alow-income tenant can look for suitable housing anywhere in the UnitedStates where a housing authority is administering a tenant-based program.According to a 1998 article by an Urban Institute expert on the program,the program has the potential to help families move to healthierneighborhoods, but several obstacles currently limit the mobility ofSection 8 voucher and certificate holders.15 For example, the local publichousing authorities that manage the programs lack strong incentives to

13An underserved area is a metropolitan census tract in which (1) the median income is less than orequal to 90 percent of the local area’s median income or (2) the minority population is greater than orequal to 30 percent of the total population and the median income is less than or equal to 120 percentof the local area’s median income.

14U.S. Housing Market Conditions, HUD, Office of Policy Development and Research (Aug. 1998).

15Margery Austin Turner, “Moving Out of Poverty: Expanding Mobility and Choice ThroughTenant-Based Housing Assistance,” Housing Policy Debate, Vol. 9, No. 2 (1998), pp. 373-394.


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encourage mobility and may lack resources to assist tenants seekingapartments. Ineffective local program management also discourageslandlords in suburban areas from participating in the program.

Some agencies are implementing programs or taking steps to addressgrowth-related issues associated with their missions. For example, theFederal Highway Administration administers the Congestion Mitigationand Air Quality Improvement Program, which funds transportationprojects that help urban areas improve air quality. The Department ofCommerce’s Economic Development Administration includes among itsstrategic funding priorities the consideration of sustainable developmentand the reuse of brownfields.16 In addition, the Farmland ProtectionProgram, administered by the U.S. Department of Agriculture (USDA),allows for the purchase of conservation easements17 or other interests onland that would limit the conversion of prime and unique farmland tononagricultural uses, such as residential development. In fiscal year 1998,USDA obligated $17.3 million under this program to preclude the conversionof about 46,000 acres with an estimated easement value of about$96 million. Nineteen states are participating in the program, includingMichigan, which expects to protect an estimated 1,728 acres, and Vermont,which expects to protect an estimated 6,830 acres.

Very Little ResearchExists on the Impactof Selected TaxPolicies on “UrbanSprawl”

Tax code provisions that subsidize homeowners through the mortgageinterest and property tax deductions are believed by some researchers toprovide an incentive to purchase the more expensive housing that issometimes located outside urban areas.18 Very little research has focusedspecifically on how preferential tax treatment for homeowners affects thedirection or the magnitude of “urban sprawl.” Some studies presentstatistics they believe imply such a relationship, but no one has directlyestimated the effects of tax preferences on “urban sprawl.” Studies ofhousing tax preferences have focused mainly on the effects of taxpreferences on the quantity of housing purchased, the price of housing, thehomeownership rate, the tendency of households to move, and federal taxexpenditures rather than on the location of the new housing. As discussedin appendix I, researchers broadly agree that removing these tax

16Brownfield sites are abandoned, idled, or underused industrial and commercial facilities whereexpansion or redevelopment is complicated by real or perceived environmental contamination.

17A conservation easement is a deed restriction that landowners voluntarily place on their property toprotect resources such as productive agricultural land or wildlife habitat.

18The location of a home is not a condition that affects a homeowner’s ability to use the mortgageinterest deduction.


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preferences would reduce both housing purchases and the price ofhousing. However, researchers have not reached consensus on themagnitude of these effects.

Some supporters of new estate tax provisions providing exclusions forqualified family-owned business interests and qualified conservationeasements believe that these provisions encourage the continuedoperation of family farms and are likely to increase donations of land forconservation purposes. A study by USDA’s Economic Research Serviceprovides some support for such claims. The study notes that the newexclusion for qualified family-owned businesses “. . .should reduce, if noteliminate, the need to sell farm assets to pay federal estate taxes. . . .”19

The study further notes that the exclusion for land subject to conservationeasement is likely to benefit a relatively small number of landowners.

The research also addresses the effect of changes in tax provisionscovering employer-paid parking benefits. While some studies indicate thatemployer-paid parking, employer-provided incentives for ridesharing, andhigh-occupancy-vehicle lanes may decrease the probability that anemployee will drive to work alone, a 1991 study on commuting incentivesnotes that factors other than commuting costs are more important inexplaining patterns of commuting.20

Environmental RegulationsPlay a Small Role inDecisions About LocatingBusinesses

While the Clean Air Act and the Clean Water Act were enacted to improvethe quality of the nation’s air and water, some have stated that they haveunintentionally contributed to “urban sprawl.” For example, localgovernments have claimed that the Clean Air Act’s regulations restrictingemissions in areas that do not meet air quality standards—typically urbanareas—contribute to decisions by businesses not to locate in central cities.However, we did not find any quantitative research supporting claims thatenvironmental regulations governing air quality and water qualityencourage growth in undeveloped areas rather than in existing urban andsuburban areas. In fact, as discussed further in appendix I, a body ofresearch shows that environmental regulations have played a small role inbusinesses’ choices of location.

19James Monke and Ron Durst, The Taxpayer Relief Act of 1997: Provisions for Farmers and RuralCommunities, USDA, Economic Research Service, Agriculture Economic Report No. 764 (July 1998),p. 18.

20Genevieve Giuliano and Kenneth A. Small, “Is the Journey to Work Explained by Urban Structure?”Urban Studies, Vol. 30, No. 9 (Nov. 1993), pp. 1485-1500.


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Because the Environmental Protection Agency (EPA) views “urbansprawl” as an environmental problem, it has initiated programs such asthe Clean Air/Brownfields Partnership Pilot to improve air quality whileencouraging the redevelopment of cities and sustainable newdevelopment. EPA started the pilot program because “it believes thatlocating development on brownfield sites within the city as opposed togreenfield sites in the surrounding areas has a net benefit for theenvironment, including cleaner air.” By documenting the air qualitybenefits of brownfield and urban redevelopment, EPA hopes to offercommunities greater flexibility in meeting federal clean air standardswhile still meeting economic development needs. Baltimore, Chicago, andDallas are participating in the pilot program.

Executive Orders onLocating Federal BuildingsEncourage Considerationof Central BusinessDistricts, but No StudiesQuantify Effects ofDecisions About Location

Some experts believe that the location of federal and postal facilities playsa significant role in the economic viability of downtown urban areas.Executive orders covering the location of federal facilities require federalagencies to give first consideration to central business areas and historicproperties when deciding where to locate. However, we did not find anystudies quantifying the impact of the location of federal and postalfacilities on “urban sprawl.” The lack of research in this area is due, inlarge part, to a lack of data. The General Services Administration (GSA),responsible for administering the policy on location for 8,073 federalfacilities, and the Postal Service, responsible for administering the policyon location for 34,377 owned and leased postal facilities, are not requiredto, and do not, centrally collect data that could be used to show whetherfederal facilities are relocating to suburban areas.

In response to our request, GSA provided data on active building leases21

with effective dates between October 1, 1995, and November 13, 1998.These data show that during the period analyzed, federally leased facilitieswere, for the most part, located in central cities, not in suburban areas. Asshown in figure 2, almost half of all leased facilities were located in centralbusiness districts. Furthermore, of the leased facilities that were locatedoutside central business districts, 91 percent were located within thecentral city limits.22 According to GSA’s data, the two most commonreasons provided by agencies for not choosing a central business district

21For buildings in cities where GSA leases 100,000 square feet or more of rental space.

22This calculation does not include 129 of the total 642 leased facilities that were located outside thecentral business district because they were not located within a metropolitan statistical area. Ametropolitan statistical area is an area that includes at least one city with 50,000 or more inhabitants oran urbanized area with a total metropolitan population of at least 100,000.


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location are that it (1) would conflict with the agency’s mission(40 percent) or (2) would not fulfill special requirements (27 percent). Forexample, the mission of the Immigration and Naturalization Service mightrequire that one of its offices be located adjacent to a major port.According to GSA, data prior to 1995 were not readily available.

Figure 2: GSA’s Data on the Locationof Federal Buildings With LeasesEffective Between October 1, 1995, andNovember 13, 1998

Inside central business district45%52%

Outside central business district

3%No data

Note: The 45 percent of buildings leased within the central business district representapproximately 17 million square feet, the 52 percent outside the central business districtrepresent about 20 million square feet, and the remaining 3 percent represent about 0.5 millionsquare feet.

Although not required to do so, Postal Service officials have pledged tocomply with the executive orders applicable to federal facilities. However,Postal Service officials said they collect data on the number of postalfacilities that relocate annually but do not collect data on how manyfacilities relocate outside central cities. As a result, they could not provideus with data that would indicate to what extent postal facilities haverelocated from central cities to suburban locations. Postal officials saidthey explore every option for maintaining retail operations in downtownlocations and, in some cases, have retained retail operations in downtownlocations and moved distribution operations to different locations. Whilethe research includes anecdotal evidence of instances in which post office


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retail facilities have relocated from downtown locations in small towns,Postal Service officials said that post offices are often the last facilities torelocate from already empty downtowns. In response to heightenedsensitivity about the location of postal facilities, the Postal Servicerecently issued regulations that establish procedures for notifying localcitizens and public officials of projects, as well as for soliciting andconsidering community input, before making a final decision to expand anexisting facility, relocate to another existing building, or start newconstruction.23 In February and March 1999, bills that include guidelinesfor the relocation, closing, consolidation, or construction of post officeswere introduced in the House and Senate, respectively.

Federal RegulatoryReview MechanismsDo Not DirectlyAddress “UrbanSprawl,” butCoordination ofGrowth-RelatedIssues Is Increasing

Regulatory review mechanisms do not directly consider “urban sprawl,”but several federal coordination efforts are addressing growth-relatedissues. Executive orders establish basic principles for agencies to followwhen developing regulations, and specific laws require agencies toconsider the impact of federal actions. For instance, laws such as NEPA andthe Farmland Protection Policy Act offer federal agencies an opportunityto consider how their actions influence growth. Coordination amongfederal agencies on growth-related issues is increasing, but most agenciescontinue to focus on specific program issues.

Regulatory ReviewMechanisms Do NotDirectly Address GrowthIssues

The executive orders governing the regulatory review process establishbasic principles for developing regulations but are not intended to address“urban sprawl.” For example, Executive Order 12866, the order thatestablishes the framework for regulatory planning and review, does notspecifically require federal agencies to consider how their actions willinfluence patterns of growth. Instead, the order outlines general principlesthat federal agencies should adhere to when developing new regulationsor considering whether to modify existing regulations. For example, theseprinciples require agencies to consider available alternatives to directregulation; prepare cost-benefit analyses when developing regulations;and, whenever feasible, seek the views of appropriate state, local, andtribal officials before imposing regulatory requirements. According to theActing Administrator of the Office of Management and Budget’s Office ofInformation and Regulatory Affairs—the office responsible for reviewing

23The Postal Reorganization Act of 1970, as amended, already requires the Postal Service to considerhow a post office’s proposed closing or consolidation will affect the community served.


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significant regulatory actions24—the principles set forth in ExecutiveOrder 12866 do not mention specific policy issues, such as “urbansprawl,” because the principles were designed to be overarching andapplicable to all regulations. Executive Order 12875 supplementsExecutive Order 12866 by requiring federal agencies to develop aneffective process for obtaining input when developing regulatoryproposals containing significant unfunded mandates.25 Nonetheless, aspart of its Sustainable Urban Environments effort, EPA plans to analyzewhether its regulations, policies, or programs create barriers ordisincentives that encourage sprawl or growth with negativeconsequences.

NEPA requires federal agencies to consider the indirect as well as the directeffects of their actions on the environment and thus offers federalagencies an opportunity to consider the influence of their actions ongrowth. NEPA requires that a detailed environmental impact statement beprepared for every major federal action that may significantly affect thequality of the human environment. According to the act and itsimplementing regulations, a statement must, among other things, presentthe environmental effects of the proposed action—including the direct,indirect, and cumulative effects. Although the Council on EnvironmentalQuality—which has issued regulations for implementing the proceduralprovisions of NEPA—has not provided guidance beyond the implementingregulations on determining indirect effects, EPA officials said that one ofthe things that federal agencies may (but are not required to) consider isthe effect of a proposed action on “urban sprawl.” Officials responsiblefor some of the water and sewer programs we reviewed said that theyconsidered growth-related issues, such as traffic congestion, as part oftheir environmental assessment under NEPA.

The Farmland Protection Policy Act, enacted in 1981, gave the federalgovernment an opportunity to control “urban sprawl” by limiting theextent to which its actions lead to the conversion of farmland. The act wasdesigned to minimize the extent to which federal programs contribute tothe unnecessary and irreversible conversion of farmland tononagricultural uses. It requires federal agencies to consider the adverseeffects of federal programs on the preservation of farmland and alternativeactions that could lessen these effects. However, USDA did not issue

24Executive Order 12866 defines significant regulations as those that may (1) have an annual effect onthe economy of $100 million or more; (2) interfere with an action taken or planned by another agency;(3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or therights and obligations of recipients; or (4) raise novel legal or policy issues.

25Unfunded mandates are laws that require an action on the part of another level of governmentwithout providing funding.


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revised regulations to respond to changes made to the law in 1985 untilJune 17, 1994, and, according to the Congressional Research Service andothers, the act has not been effectively implemented.

Coordination onGrowth-Related Issues IsIncreasing

Coordination among federal agencies and between federal agencies andtheir state and local counterparts on growth-related issues has steadilyincreased in recent years through the efforts of a federal advisory groupand EPA. The President’s Council on Sustainable Development, abroad-based federal advisory committee established in 1993, is addressingdevelopment and growth issues by encouraging policies to supportregional collaboration among federal, state, and local governmentagencies; public interest and community groups; and businesses. TheCouncil issued an initial report in 199626 that included goals and indicatorsof sustainable development—such as decreasing traffic congestion andincreasing urban green space—and recommendations for changes at alllevels of government that the Council believes must occur to achievesustainable development.27 On January 9, 1999, the Council released adraft of its latest report to the President presenting recommendations infour policy areas, including policies to build partnerships to strengthencommunities. The Council expects to finalize the report in the spring of1999. EPA also initiated a Smart Growth network to share informationamong federal agencies and other interested parties on issues related to“urban sprawl.”

More narrowly focused federal interagency coordination efforts areindirectly addressing growth-related issues. These include efforts such asthe Federal Interagency Working Group on Brownfields, the CommunityEmpowerment Board, and the Clean Water Action Plan. The FederalInteragency Working Group on Brownfields, established in 1996, is aforum for federal agencies to exchange information on brownfields-relatedactivities and to develop a coordinated national agenda on brownfields.The federal brownfields program focuses on redeveloping abandonedindustrial and commercial sites. The Community Empowerment Board’smission is to facilitate interagency cooperation, engage its members andagencies to ensure follow-through on commitments to local areas, andassist HUD and USDA with urban and rural programs. The purpose of theClean Water Action Plan is to coordinate the work of EPA, USDA, and other

26Sustainable America: A New Consensus for Prosperity, Opportunity, and a Healthy Environment forthe Future, The President’s Council on Sustainable Development (Feb. 1996).

27Sustainable development is development that meets the needs of the present generation withoutcompromising the ability of future generations to meet their own needs.


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federal agencies to improve and strengthen water pollution control efforts.As part of this initiative, EPA is working with other agencies to identifyways to support locally initiated smart growth efforts designed to improvewater quality.

In addition, Executive Order 12372 provides a vehicle for coordinationbetween the federal government and state and local governments. Thisorder, dated July 14, 1982, requires federal agencies to provideopportunities for affected state and local officials to review proposedfederal financial assistance and direct federal development.28 Applicantsfor the aid are expected to respond to concerns raised by state or localagencies before the application is approved by the federal agency.According to federal officials, concerns raised under this processsometimes include growth-related issues.

Some experts on local growth issues have recommended that the federalgovernment use a regional approach to address local growth issues. Forinstance, the Center for Neighborhood Technology, a Chicago-basednonprofit group that supports community development issues linked toecological improvements, endorses a stronger linkage between the federalgovernment and metropolitan areas to solve regional problems. Accordingto a 1997 Center article, the federal government can help further regionalgoals through leverage, or using its resources to enhance networkrelationships; linkage, or connecting various community networks witheach other; and learning, or developing network capabilities forcommunities to more effectively reach their goals.29 Proponents ofregionalism often cite the metropolitan planning organization structureestablished by the Intermodal Surface Transportation Efficiency Act of1991 and continued with only modest refinements by the TransportationEquity Act of the 21st Century as an example of how the federalgovernment is responding to local needs within regions.

Observations The extent of the federal influence on “urban sprawl” is not welldocumented or quantified. The lack of agreement on a definition of“urban sprawl,” coupled with the many interrelated factors thatcontribute to this condition, makes it extremely difficult to isolate andmeasure the influence of specific factors—including those relating tofederal programs and policies. The shortage of quantitative evidence does

28Executive Order 12372 was slightly amended by Executive Order 12416 in Apr. 1983.

29Clement Dinsmore, The Federal Role in Metropolitan Cooperation, Center for NeighborhoodTechnology (1997).


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not mean that federal programs and policies do not have an impact on“urban sprawl”; it simply means that the level of federal influence isdifficult to determine. Even so, growth-related considerations areemerging as concerns for federal agencies. In addition, state and localgovernments, which remain primarily responsible for land-use decisions,are taking steps such as passing legislation to manage growth. Though alllevels of government are searching for ways to counter the negativeeffects of “urban sprawl” and the unintended consequences of federalpolicies, these efforts will be constrained by the limited availability ofquantitative data and the potential costs of identifying spending patterns.

Agency Commentsand Our Evaluation

We provided a draft of this report to the 13 federal agencies—USDA,Commerce (for the Economic Development Administration), Defense (forthe U.S. Army Corps of Engineers), Energy, EPA, GSA, HUD, the Interior, theInternal Revenue Service, Transportation, Treasury, the Office ofManagement and Budget (OMB), and the U.S. Postal Service—thatadminister or oversee the programs and policies discussed in this report.Commerce, EPA, and GSA provided letters commenting on the draft thatappear in appendixes III, IV, and V of the report, along with our detailedresponses. Energy, HUD, the Interior, the Army Corps of Engineers, theInternal Revenue Service, and OMB provided clarifying language andtechnical comments that we incorporated into the report as appropriate.USDA, Treasury, and the U.S. Postal Service did not have any comments onthe report.

Commerce’s letter characterized the report as a fair and appropriaterepresentation of “urban sprawl” as it relates to the programs of theDepartment’s Economic Development Administration (EDA). Commerce’sadditional comments focused primarily on EDA’s local planning processand suggested that the process, which involves multicounty planningorganizations that assist EDA in establishing priorities for projects andinvestments, could be viewed as another model for regionalism and ameans for the federal government to address local growth issues. BecauseEDA’s local planning process was not cited as an example of regionalism inthe literature we reviewed or by the officials we interviewed, we did notreview the process and, therefore, did not add it as an example in thereport. See appendix III.

EPA agreed that most researchers have found that federal policiescontribute, to some degree, to sprawl, but that the magnitude and extentof the federal contribution is difficult to quantify. EPA said we could have


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made a stronger case as to whether certain federal policies contribute tolower-density development by grouping policies that have similar effectsin one section and noting that they promote low-density development. Inaddition, EPA said that good data exist on some federal policies—such astransportation—and their contribution to outward movement and that wecould highlight these areas. While we agree with EPA that there is researchon several federal programs and policies that may also contribute tooutward movement, the lack of research in other areas makes thesuggestion about grouping the policies in one section impractical. Inaddition, creating such a section in the report might lead readers toassume that the other policies do not contribute to lower-densitydevelopment when, in reality, research does not exist to prove the pointeither way. Therefore, we did not make this change to the report. EPA wasalso concerned about our discussion of the impact of outward growth andsaid there is widespread agreement within the research community on theeffects of outward growth. We disagree with EPA that there is widespreadagreement. As summarized in appendix II of the report, a synthesis ofavailable literature found very little agreement on many alleged positiveand negative effects of “urban sprawl.” Because our intent was to providea balanced discussion of the positive and negative implications of “urbansprawl” cited by experts, we revised the language in the report to make itclear that statements about positive and negative effects are the views ofexperts. See appendix IV.

GSA’s comments provided supplemental information on the agency’simplementation of the executive orders governing the location of federalfacilities. We considered GSA’s comments on the implementation of theexecutive orders but did not make any changes to the report because webelieve that the report contains sufficient information on these activities.GSA also provided additional information on its activities that support theFederal Livable Communities Agenda, introduced as part of the fiscal year2000 budget. For example, among other things, GSA began a GoodNeighbor Program in 1996 that encourages the use of space on the groundfloor of federal buildings for restaurants and shops, as well as the use offederal buildings and plazas for activities and events. In response to GSA’scomments, we referred in appendix I of the report to GSA’s Good NeighborProgram. See appendix V.

Along with their technical comments, HUD and OMB provided generalcomments. HUD praised the report for recognizing the complex forces ofurban development and decline and for treating the subject withobjectivity. OMB thought the report implied that there is no role for the


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federal government with respect to “urban sprawl.” OMB said that a moreappropriate conclusion would be that “. . . the federal government’sappropriate response may be to align its own actions in support of localefforts and provide a broad array of tools to local communities so thatthey can address issues in a comprehensive manner.” However, the reportdoes not state that there is no role for the federal government, but ratherobserves that it is difficult, on the basis of existing research, to determinewhat the federal role should be. We also describe the role of the federalgovernment in several initiatives.

Scope andMethodology

To determine the history and implications of “urban sprawl,” weconducted interviews and collected documentation and studies from theliterature on sprawl and growth-related issues. Specifically, weinterviewed officials from federal, state, and local governments;educational institutions, such as the Albany Law School; and privatenonprofit organizations, such as the Brookings Institution and the NationalTrust for Historic Preservation. We attended the National Governors’Association’s Conference on Smart Growth, the GeorgiaConservancy/Urban Land Institute/Environmental Protection AgencySmart Growth Conference, and the Second Annual Partners for SmartGrowth Conference. To better understand the implications of “urbansprawl” at the local level, we attended round table discussions on sprawlin Burlington, Vermont, and Denver, Colorado. We also reviewed keystudies such as The Costs of Sprawl Revisited by Robert Burchell andothers and Crabgrass Frontier: The Suburbanization of the United Statesby Kenneth Jackson. A selected bibliography of the studies we reviewedappears at the end of this report.

To determine the evidence that exists on the federal influence on “urbansprawl,” we interviewed officials and collected documentation andstudies from the federal agencies administering selected federal programs.Specifically, we interviewed federal officials and gathered documentationfrom the departments of Agriculture, Commerce, Energy, HUD, the Interior,Transportation, and the Treasury and agencies including the U.S. ArmyCorps of Engineers, EPA, GSA, the Internal Revenue Service, OMB, and theU.S. Postal Service. We also drew on our own prior work on theseagencies.

To further identify quantitative evidence on how selected federal programsand policies influence “urban sprawl,” we conducted literature searchesand interviewed and gathered studies from think tanks and advocacy


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groups. We searched economic and business literature to identifyquantitative research on the federal influence on sprawl. We did notindependently assess the validity of the research. We interviewed officialsand gathered studies from organizations such as the American FarmlandTrust, Brookings Institution, Fannie Mae, National Academy of PublicAdministration, National Association of Home Builders, NationalAssociation of Realtors, Natural Resources Defense Council, NationalTrust for Historic Preservation, Northeast-Midwest Institute, SurfaceTransportation Policy Project, Transportation Research Board, U.S.Conference of Mayors, and Urban Institute. In addition, we employed J.M.Pogodzinski, an economics professor from San Jose State University, toidentify and summarize research on the implications of federal tax policieson sprawl. To identify major federal municipal water and sewer programs,we also searched the June 1998 edition of the Catalog of Federal DomesticAssistance. We did not include water and sewer programs in our listing ifthey did not provide assistance for the new construction, upgrade,operation, or maintenance of municipal systems or if they had not had atleast one annual funding or expenditure of approximately $50 million ormore since fiscal year 1995. We also conducted an electronic mail surveyof colleges and universities with urban/regional planning programsaccredited by the American Planning Association. We received responsesfrom 14 schools.

To identify regulatory review and coordination mechanisms related to“urban sprawl,” we conducted interviews with and collecteddocumentation and studies from federal agencies. We reviewed executiveorders and the Council on Environmental Quality’s regulations on NEPA.We interviewed federal officials at HUD, EPA, and OMB. We also reviewedreports published by the President’s Council on Sustainable Developmentand the Center for Neighborhood Technology.

We performed our work from July 1998 through April 1999 in accordancewith generally accepted government auditing standards.

As arranged with your offices, unless you announce its contents earlier,we plan no further distribution of this report until 5 days after the date ofthis letter. At that time, we will send copies to Senator John Chafee,Chairman, Senate Committee on Environment and Public Works;Representative Thomas Bliley, Jr., Chairman, and Representative JohnDingell, Ranking Minority Member, House Committee on Commerce;Representative Bud Shuster, Chairman, and Representative James L.


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Oberstar, Ranking Minority Member, House Committee on Transportationand Infrastructure; and other appropriate congressional recipients. We arealso sending copies of this report to the Honorable Dan Glickman,Secretary of Agriculture; the Honorable William M. Daley, Secretary ofCommerce; the Honorable William S. Cohen, Secretary of Defense; theHonorable Bill Richardson, Secretary of Energy; the Honorable AndrewCuomo, Secretary of Housing and Urban Development; the HonorableBruce Babbitt, Secretary of the Interior; the Honorable Rodney E. Slater,Secretary of Transportation; the Honorable Robert E. Rubin, Secretary ofthe Treasury; the Honorable Charles O. Rossotti, Commissioner of InternalRevenue; the Honorable Carol M. Browner, Administrator of theEnvironmental Protection Agency; the Honorable David J. Barram,Administrator of the U.S. General Services Administration; the HonorableWilliam Henderson, Postmaster General; and the Honorable Jacob Lew,Director of the Office of Management and Budget. Copies will also bemade available to others upon request.

If you have any questions, please call me at (202) 512-7631. Majorcontributors to this report are listed in appendix VI.

Judy A. England-JosephDirector, Housing and Community Development Issues


Contents

Letter 1

Appendix I The Influence ofSelected FederalPolicies and Programson “Urban Sprawl”

28Agriculture 28Environmental Protection 29Housing 32Location of Federal and Postal Facilities 34Taxation 37Transportation 41Utility Pricing 44Water-Sewer Infrastructure 47

Appendix II Summary of Studieson Factors Related to“Urban Sprawl”

53

Appendix III Comments From theDepartment ofCommerce

58GAO’s Comments 61

Appendix IV Comments From theEnvironmentalProtection Agency


Appendix V Comments From theGeneral ServicesAdministration



Contents

Appendix VI Major Contributors toThis Report

69

Selected Bibliography 70

Tables Table I.1: Reasons for Locating Federal Facilities Outside theCentral Business District

35

Table I.2: Analysis of Federal Highway Spending for Fiscal Year1995

44

Table I.3: Availability of Aggregate Funding Data for MajorFederal Water and Sewer Programs, Distributed by Type ofActivity

50

Figures Figure 1: Percentage of Population in 10 Largest MetropolitanAreas, as Defined in 1990, Living Inside and Outside the CentralCity, 1950-90

5

Figure 2: GSA’s Data on the Location of Federal Buildings WithLeases Effective Between October 1, 1995, and November 13,1998

15

Figure I.1: Obligation of Federal Funds for HighwayImprovements, Fiscal Years 1992-97

43

Abbreviations

DOE Department of EnergyDOT Department of TransportationEDA Economic Development AdministrationEPA Environmental Protection AgencyFHA Federal Housing AdministrationGAO General Accounting OfficeGSA General Services AdministrationHUD Department of Housing and Urban DevelopmentNEPA National Environmental Policy ActOMB Office of Management and BudgetUSDA U.S. Department of Agriculture


Appendix I

The Influence of Selected Federal Policiesand Programs on “Urban Sprawl”

This appendix presents the results of our review of research on therelationship between specific federal programs and policies and “urbansprawl.” The questions included in the appendix were asked in theJune 10, 1998, request letter. The appendix covers policies and programsrelated to agriculture, environmental protection, housing, the location offederal and postal facilities, taxation, transportation, utility pricing, andwater and sewer infrastructure. For each policy, the appendix includes(1) the results of our literature review and (2) the views of federal, state,and local government agencies; advocacy groups; and academia.

Agriculture

Issue: Which federal agricultural programs, if any, support the objective ofmaintaining prime agricultural land near areas becoming more urban?

Research Results: We identified only one U.S. Department of Agriculture (USDA) program thatis specifically designed to preserve prime agricultural land—the FarmlandProtection Program. The objective of this program is to purchaseconservation easements30 or other interests on land that would limit theconversion of prime and unique farmland to nonagricultural uses. TheDepartment has already obligated the $35 million made available for theprogram, and the President has requested an additional $28 million inCommodity Credit Corporation funds and $50 million in discretionaryfunds for the program in his fiscal year 2000 budget submission. Inaddition, the Farmland Protection Policy Act requires federal agencies toconsider the adverse effects of federal programs on the preservation offarmland and alternative actions that could lessen these effects. However,according to the literature we reviewed, the act has not been enforced andis, therefore, limited in its effectiveness. USDA officials told us that the actis not enforceable because it offers no guidance for choosing a lessdamaging alternative and no incentives for doing so.

Whether urbanization poses a threat to prime agricultural land andagricultural production has been debated in recent years. For example, in1994, USDA’s Economic Research Service reported, after studying rural landconversion rates between 1960 and 1980, that the loss of farmland to urbanuses did not pose a threat to total cropland or agricultural production in

30A conservation easement is a deed restriction that landowners voluntarily place on their property toprotect resources such as productive agricultural land and wildlife habitat.


Appendix I

The Influence of Selected Federal Policies

and Programs on “Urban Sprawl”

the United States.31 In a 1996 report, the Economic Research Serviceconcluded, on the basis of analyses conducted over the past two decades,that urbanization does not pose a threat to the nation’s supply of primecropland or its ability to produce food.32 In 1997, the American FarmlandTrust reported, after analyzing USDA’s most recent National ResourcesInventory, that about 4.3 million acres of the nation’s prime and uniquefarmland were converted between 1982 and 1992 and that most of this losswas due to urbanization.33 The American Farmland Trust also determinedthat 79 percent of the fruit, 69 percent of the vegetables, 52 percent of thedairy products, and 28 percent of the meat produced in the United Stateswas produced on high-quality farmland threatened by development.Although there is disagreement on the potential impact of lost farmland,both the Economic Research Service and the American Farmland Trusthave stated that farmland preservation is one way to curb “urbansprawl.” USDA’s Natural Resources Conservation Service is equallyconcerned about erosion resulting from the increased use of marginal landin agricultural production.

EnvironmentalProtection

Issue: Do federal policies on air quality encourage development in greenfields,rather than in existing urban and suburban areas?

Research Results: Certain provisions of the Clean Air Act have been criticized because theymay encourage development in greenfields, rather than in existing urbanand suburban areas; however, research has shown that private firms’decisions about location are not influenced to any significant extent byenvironmental regulations. The provisions often cited are the stringentrestrictions imposed when an area is not in compliance with the standardsfor certain air pollutants, such as ozone, and the requirement that federallysupported transportation activities conform with states’ plans for attainingand maintaining air quality standards. However, according to a study of

31Marlow Vesterby, Ralph E. Heimlich, and Kenneth S. Krupa, Urbanization of Rural Land in the UnitedStates, USDA, Economic Research Service, Agricultural Economic Report No. 673 (Mar. 1994).

32Keith Wiebe, Abebayehu Tegene, and Betsey Kuhn, Partial Interests in Land: Policy Tools forResource Use and Conservation, USDA, Economic Research Service, Agricultural Economic ReportNo. 744 (Nov. 1996).

33A. Ann Sorensen, Richard P. Greene, and Karen Russ, Farming on the Edge, American FarmlandTrust (Mar. 1997).


Appendix I



the effects of environmental regulations on competitiveness, evidencefrom U.S. studies questions the widespread belief that environmentalregulations have a significant effect on the siting of new plants in theUnited States.34 In addition, a review of studies analyzing the effects ofenvironmental regulation on decisions about location concluded that“although we cannot conclude statistically that environmental regulationsare unimportant without first asking more refined questions, there is littleevidence that regulations have become a truly important location factorfor a wide spectrum of industries.”35 Finally, a study of the impact ofenvironmental regulations on the location of Fortune 500 manufacturingbranch plants did not find any statistically significant effects ofenvironmental regulation on the location of businesses.36

Issue: Do requirements for water quality treatment (including combined seweroverflows) encourage development in greenfields, rather than in existingurban and suburban areas?

Research Results: Combined sewer systems are sewer systems that collect both storm waterrunoff and sanitary sewage in the same pipe. They serve roughly 950communities with about 40 million people. Most communities withcombined sewer systems are located in the Northeast and Great Lakesregions. According to the Environmental Protection Agency (EPA),communities with combined sewer systems will incur up to $45 billion incosts to comply with its combined sewer overflow control policy. Issuesassociated with the costs of compliance have been raised by the CSOPartnership, a consortium of about 100 communities with combined seweroverflow problems. A Partnership official stated that municipalities servedby such systems are often required to raise their water and sewer rates tocover the costs of compliance; the higher rates then discourage growth inthese jurisdictions and drive development out to the surrounding areas.However, we did not find any quantitative research supporting this view.

As part of the National Pollutant Discharge Elimination System, EPA

requires certain entities to obtain permits for their storm water discharges.In November 1990, the agency issued storm water control regulations thatrequire communities with over 100,000 inhabitants and industrial sites

34Adam B. Jaffe, et al., “Environmental Regulation and the Competitiveness of U.S. Manufacturing:What Does the Evidence Tell Us?” Journal of Economic Literature, Vol. 33 (Mar. 1995), pp. 132-163.

35Kelly Robinson, “Industrial Location and Air Pollution Controls: A Review of Evidence From theUSA,” Progress in Human Geography, Vol. 19, No. 2 (1995), p. 223.

36Timothy J. Bartik, “The Effects of Environmental Regulation on Business Location in the UnitedStates,” Growth and Change, Vol. 19, No. 3 (Summer 1988), pp. 22-44.


Appendix I



(including construction activity sites involving at least 5 acres) to obtainpermits. In January 1998, the agency proposed regulations that wouldextend permitting requirements to small communities in urbanized areasand small construction sites. We did not find any quantitative researchindicating that EPA’s storm water control regulations encourage “urbansprawl.”

Issue: Does the literature mention other Clean Water Act provisions that caninfluence “urban sprawl?”

Research Results: Although several documents we reviewed stated that federal wetlandspolicy influences “urban sprawl,” we did not find any quantitativeresearch proving that federal policies on wetlands encourage “urbansprawl.” Section 404 of the Clean Water Act regulates the discharge ofdredged and fill material into the nation’s waterways, including wetlands.Most land preparation and construction activities in wetlands wouldinvolve the discharge of fill and would, therefore, require a permit fromthe U.S. Army Corps of Engineers. In fiscal year 1998, the Corps issued89,857 permits, allowed about 31,090 wetlands acres to be filled, andrequired that about 46,630 wetlands acres be mitigated.37 An articleanalyzing the influence of environmental mandates on urban growthconcluded that although section 404 does not significantly limit urbangrowth, it does discourage and delay development in some areas.38

The Sierra Club and the Environmental Working Group have reported thatthe Corps is encouraging development by issuing certain nationwidepermits—generic licenses that grant blanket authorization for specifictypes of fill in wetlands of certain sizes.39 One of the permits they criticizedwas Nationwide Permit 26, which allows discharges into headwaters andisolated waters as long as they do not cause the loss of more than 3 acresof waters. In response to concerns about the extent to which adverseeffects are being authorized by Nationwide Permit 26, the Corps agreed to

37Through mitigation, the Corps seeks to offset the adverse effects of wetlands conversion, generallyby requiring the replacement of important wetlands functions and values.

38Lindell Marsh, Douglas Porter, and David Salvesen, “The Impact of Environmental Mandates onUrban Growth,” Cityscape: A Journal of Policy Development and Research, Vol. 2, No. 3 (Sept. 1996),pp. 127-154.

39Brett Hulsey, $ubsidizing Disaster: How Your Tax Money and Weak Wetland Protection IncreaseYour Risk of Being Flooded, Sierra Club Midwest Office (Apr. 15, 1997).


Appendix I



replace the permit with activity-specific permits that more clearly definethe activities being regulated.

Housing

Issue: Which federal housing programs, if any, have credit policies thatencourage new development in suburban areas rather than reinvestmentin central city areas?

Research Results: The Department of Housing and Urban Development (HUD), through itsFederal Housing Administration (FHA), operates the federal government’slargest single-family home mortgage insurance program and oversees thefinancial safety and soundness of the two privately owned but federallychartered corporations—Fannie Mae (the Federal National MortgageAssociation) and Freddie Mac (the Federal Home Loan MortgageCorporation). These programs represent the primary tools used by HUD toreach its goal of increasing homeownership opportunities for low- andmoderate-income families and for those living in underserved areas.

HUD’s single-family home mortgage insurance programs are available to allqualified borrowers for homes located in rural, suburban, or central cityareas. For this reason, it is not clear what impact, if any, these programscurrently have on “urban sprawl.” While FHA’s relatively liberal credit anddown payment requirements would facilitate qualified inner city residents’purchases of homes in the suburbs, other aspects of the program aredesigned to stimulate mortgage lending in the inner city. In addition, datafrom FHA show that its insured loans in metropolitan areas are almostevenly concentrated between central cities and suburbs.

Our review of existing research identified no recent studies that directlyaddress the relative impact of federal single-family housing programs ondevelopment in suburban and central city locations. However, reports byHUD and GAO show that FHA is an important source of mortgage insurancefor low-income and minority home buyers and for homes purchased incentral cities.40, 41 Under the Home Mortgage Disclosure Act, the federal

40An Analysis of FHA’s Single-Family Insurance Program, HUD, Office of Policy Development andResearch (Oct. 1995).

41Homeownership: FHA’s Role in Helping People Obtain Home Mortgages (GAO/RCED-96-123, Aug. 13,1996).


Appendix I



government collects data on the income, race, and geographic location ofborrowers obtaining home mortgages. These data show that in 1996almost half (46 percent) of FHA’s single-family loans were made for homeslocated in central cities and 41 percent were made for homes in what aredefined as underserved areas.42 In comparison, 37 percent of conventionalloans purchased by Fannie Mae and Freddie Mac were for homes locatedin central cities.

Issue: Do low-income housing tax credits favor new construction rather thanrehabilitation of existing housing?

Research Results: The Low-Income Housing Tax Credit program uses tax credits as anincentive for developers and investors to provide affordable rental housingfor households whose income is at or below specified income levels.Recent quantitative studies include information on the mix of newconstruction and rehabilitation and indicate whether projects are locatedin urban or rural areas. A 1997 GAO report revealed that most low-incomehousing developments were newly constructed, but some wererehabilitated.43 This report examined projects placed in service between1992 and 1994. Another study that looked at 2,554 tax credit projectscompleted between 1987 and 1996 found that the number of projectslocated in central cities increased over time.44 This study focused on datafrom four syndicators of tax-credit equity.45 HUD reviewed projectscompleted primarily between 1992 and 1994 found that more than half ofthe units were located in central cities.46 HUD officials recognize there maybe some regional implications for this program and believe moreinformation on the potential impact of the Low-Income Housing TaxCredit program’s policies is needed.

42Metropolitan census tracts in which (1) the median income is less than or equal to 90 percent of thelocal area’s median income or (2) the minority population is greater than or equal to 30 percent of thetotal population and the median income is less than or equal to 120 percent of the local area’s medianincome.

43Tax Credits: Opportunities to Improve Oversight of the Low-Income Housing Program(GAO/GGD/RCED-97-55, Mar. 28, 1997).

44Jean L. Cummings and Denise DiPasquale, Building Affordable Rental Housing: An Analysis of theLow-Income Housing Tax Credit Program, City Research (Feb. 1998).

45Syndicators act as brokers between developers and investors by pooling several projects into one taxcredit equity fund and marketing the tax credits to investors, thus spreading the risk to investorsacross the projects.

46Abt Associates, Inc., Development and Analysis of the National Low-Income Housing Tax CreditDatabase, HUD, Office of Policy Development and Research (July 1996).


Appendix I



Location of Federaland Postal Facilities

Issue: To what extent are federal agencies complying with the executive ordersgoverning federal facility location decisions?

Research Results: Executive Orders 12072 and 13006 require federal agencies making urbanlocation decisions to give first consideration to central business areas andhistoric properties. According to information provided by the GeneralServices Administration (GSA) on 1,242 active leases, about 45 percent ofthe leased facilities are located within central business districts.47 GSA

explained that a federal facility might be located outside a central businessdistrict if (1) a location within the central business district conflicted withthe agency’s mission, (2) an agency’s special requirements could not bemet within the central business district, or (3) there was not enoughcompetition within the central business district.

The Rural Development Act of 1972, as amended, directs federal agenciesto give first priority to locating new offices and other facilities in ruralareas. However, when an agency’s mission and programs require an urbanlocation, the agency must comply with Executive Orders 12072 and 13006.Executive Order 12072, promulgated in August 1978 by President Carter,directs federal agencies to give first consideration to a centralizedcommunity business area and adjacent areas of similar character48 whenfilling space needs in urban areas. Executive Order 13006, issued byPresident Clinton in May 1996, reaffirms the commitment set forth inExecutive Order 12072 to strengthen the nation’s cities by encouraging thelocation of federal facilities in central cities. Specifically, it requires federalagencies to give first consideration to historic properties within historicdistricts, especially those located in central business areas.

GSA is responsible for administering Executive Orders 12072 and 13006.The implementing regulations for Executive Order 12072 state thatagencies can locate outside a central business area only if the marketcannot supply suitable space or if a central business area cannot meet the

47Central business districts are specific districts within central business areas where localities havechosen to concentrate the development of offices or mixed uses.

48These adjacent areas may include empowerment zones or other redevelopment areas that are outsidethe central business district but still within the city limits.


Appendix I



agency’s mission requirements. As discussed in the letter of this report,almost half of the leased facilities that GSA analyzed were located in centralbusiness districts. Moreover, as shown in table I.1, the most commonreason cited by GSA for locating outside a central business district was thatlocating within it would conflict with the agency’s mission. We did notindependently verify GSA’s reasons.

Table I.1: Reasons for LocatingFederal Facilities Outside the CentralBusiness District

Reason Number of leases Percentage of leases

Location within the centralbusiness district wouldconflict with the agency’smission 257 40

The agency’s specializedrequirements could not bemet within the centralbusiness district 175 27

Competition was inadequatewithin the central businessdistrict 133 21

Other reasons (e.g., thecentral business district wasnot defined) 34 5

Combination of the above 20 3

No information available 23 4

Total 642 100

Source: GAO’s analysis of data provided by GSA.

GSA has been both criticized and praised for its enforcement of ExecutiveOrder 12072. For instance, the National Council for Urban EconomicDevelopment criticized GSA for allowing the Internal Revenue Service toleave the central business district in Fresno, California, despite efforts tofind a suitable location within the downtown area. According to GSA, itreviewed the Internal Revenue Service’s request to move out of downtownFresno and found that the request was mission driven and that the InternalRevenue Service was in compliance with Executive Order 12072. TheSecretary of the Treasury attested to the fact that the move was based onthe Internal Revenue Service’s mission-related requirements. InDecember 1998, the Mayor of Baltimore, Maryland, praised GSA for addingover 500 new federal jobs to the city and complying with Executive Order12072.


Appendix I



In addition to enforcing the executive orders covering the location offederal facilities, GSA initiated the Good Neighbor Program in 1996 topromote local economic and civic activities. The agency uses the programto accomplish a variety of civic initiatives in communities with federalfacilities. For instance, GSA sets aside ground-floor and plaza space infederal buildings for public activities and events and joins businessimprovement districts—districts created by property owners so that theycan tax themselves to cover the costs of maintenance, security, and otherservices.

Issue: Is there an effective process for considering the potential impact ofrelocating postal facilities on existing communities?

Research Results: The U.S. Postal Service issued regulations effective October 5, 1998, thatgreatly expanded its procedures for notifying local citizens and publicofficials of facility projects, as well as for soliciting and consideringcommunity input, before making a final decision to expand an existingfacility, relocate to another existing building, or start new construction.These procedures, which are similar to those required when post officesare closed, include

• meeting with and sending a letter to high-ranking local public officials todescribe the project that is under consideration;

• sending an initial news release to local media;• posting a copy of the letter to local officials and/or the news release in the

lobby of the affected post office; and• except under exceptional circumstances, attending or conducting at least

one mandatory public hearing to describe the project, invite questions,solicit written comments, and describe the process for consideringcommunity input.

Although it is too soon to determine if the new process will be effective,critics have maintained that members of affected communities should beable to appeal relocation decisions to the Postal Rate Commission, as theycan do when post office closures are planned. In February andMarch 1999, bills that include guidelines for the relocation, closing,consolidation, or construction of post offices were introduced in theHouse and Senate, respectively. The bills would allow any person servedby a post office whose relocation has been approved to appeal therelocation decision to the Postal Rate Commission.


Appendix I



According to some of the researchers whose work we reviewed, therelocation of post office retail facilities from downtown locations tooutlying areas is detrimental to the downtown economy and contributes to“urban sprawl.” However, we did not find any quantitative research thatsupports this conclusion. One reason for the lack of quantitative researchmay be a lack of data. Although the Postal Service can determine howmany relocations occurred during a given year, it cannot readily determinehow many postal facilities were relocated to outlying areas because it doesnot have centralized data showing whether the facilities were relocatedacross the street or in outlying areas. However, organizations such as theNational Trust for Historic Preservation follow this issue and havedocumented instances when post offices have been relocated outsidecentral business districts.

Taxation

Issue: Do federal tax provisions that create a tax advantage for more expensivehousing tend to favor low-density development outside existing urban andsuburban areas?

Research Results: We identified many studies of federal tax preferences for owner-occupiedhousing that focus mainly on the effects of tax preferences on the quantityof housing consumed, the price of housing, the homeownership rate, thetendency of households to move, and federal tax expenditures. We foundvery little research that focused specifically on whether preferential taxtreatment for homeowners affects “urban sprawl.” Although someauthors present statistics that they believe imply such a relationship, noone has directly estimated the effects of tax preferences on “urbansprawl.”

The main features of the federal tax code pertaining to owner-occupiedhousing that have been analyzed in the literature are the deductibility ofmortgage interest payments and property taxes and the tax treatment ofcapital gains on housing. Investment in owner-occupied housing is treateddifferently from other investments under the income tax rules in threeways. First, the value of housing services (the imputed rental income) thata homeowner derives from occupying his or her own house is not includedin his or her taxable income. This means that an owner-occupier’s income


Appendix I



from housing (the imputed rental income) is treated differently from alandlord’s rental income, which is subject to tax. Second, under theTaxpayer Relief Act of 1997, gains due to the appreciation ofowner-occupied homes are exempt from income taxation for almost alltaxpayers. Third, other costs of homeownership (e.g., maintenance costs)are not deductible.

The direction and magnitude of the effects of the tax preferences forowner-occupied housing on the location of housing are also uncertain. Toanalyze the effects of these preferences, Blackely and Follain employed awidely used economic model of households’ locational choices.49 Theyconcluded that, in general, the impact of the preferences on locationalchoice was ambiguous. For specific model assumptions that theyconsidered reasonable, they found that the preferences may, in fact, be acountervailing force to suburbanization.

A study by Gyourko and Voith developed three theoretical models todetermine the conditions under which tax preferences for owner-occupiedhousing would contribute to the decentralization of metropolitan areas.50

The authors did not develop quantitative estimates of these effects.Gyourko and Voith argued that tax preferences by themselves do notcreate greater population decentralization, less dense central cities, andmore extreme residential sorting by income. These spatial effects arisefrom the interaction of the tax treatment of housing with other features ofthe housing market, such as land-use constraints and methods of financinglocal amenities.

Some other recent studies have analyzed the effect on “urban sprawl” ofmodifying the tax treatment of capital gains.51 Under the Taxpayer ReliefAct of 1997, individuals are permitted to exclude from taxable income upto $250,000 of gain (generally $500,000 for joint filers) realized on the saleor exchange of property that has been used as a principal residence. Thereare certain conditions the taxpayer must satisfy to qualify.

49Dixie Blackley and James R. Follain, “Inflation, Tax Advantages to Homeownership and theLocational Choices of Households,” Regional Science and Urban Economics, Vol. 13, No. 4(Nov. 1983), pp.505-516.

50Joseph Gyourko and Richard Voith, “Does the U.S. Treatment of Housing Promote Suburbanizationand Central City Decline?” Working Paper No. 97-13, Federal Reserve Bank of Philadelphia (Sept. 17,1997).

51Linking Tax Law and Sustainable Development: The Taxpayer Relief Act of 1997, Environmental LawInstitute (1998) and The IRS Homeseller Capital Gain Provision: Contributor to Urban Decline, OhioHousing Research Network (Jan. 5, 1994).


Appendix I



We found no quantitative studies estimating the effect, if any, on “urbansprawl” of the current favorable capital gains treatment forowner-occupied housing. One study suggests that the past treatment ofcapital gains contributed to the outmigration from cities when homeprices in central cities declined relative to home prices in the suburbs.52 Ahomeowner with accrued capital gains had a disincentive to move inwardif such a move involved the purchase of a less expensive home becausethat purchase would require the homeowner to pay tax on at least some ofthe gains earned on the sale of the original home. The Environmental LawInstitute notes that the recent change in the law removes thisdisincentive.53 The Institute also suggests that the new treatment—underwhich exclusions may be claimed every 2 years—may encourage somehomeowners to live in and rehabilitate a succession of older urban homesin order to earn tax-free gains. The Environmental and Energy StudyInstitute suggests that another effect of the favorable treatment may be toencourage wealthier taxpayers to purchase larger homes on larger lots,which are more likely to be in outlying areas.54 No estimates have beenmade of the magnitude of these, or any other, effects of the current capitalgains exclusion on the amount or location of the housing purchased.

Several recent papers have used models and simulations to estimatevarious effects associated both with removing the mortgage interest andproperty tax deductions and with altering the treatment of capital gains inhousing, but these papers have not tied their results specifically to “urbansprawl.”55 There is broad agreement that removing these tax preferenceswould reduce overall housing consumption and the price of housing.

52The IRS Homeseller Capital Gain Provision: Contributor to Urban Decline, Ohio Housing ResearchNetwork (Jan. 5, 1994).

53See footnote 51.

54Don Gray and Carol Werner, “Sustainability Provisions in the New Tax Law,” Memorandum toMembers of the Sustainable Communities Advisory Committee and Other Potentially InterestedParties, Environmental and Energy Study Institute (Nov. 6, 1997).

55James Berkovec and Don Fullerton, “A General Equilibrium Model of Housing, Taxes and PortfolioChoice,” Journal of Political Economy, Vol. 100, No. 2 (1992); Leonard E. Burman, Sally Wallace, andDavid Weiner, “How Capital Gains Taxes Distort Homeowners’ Decisions,” 89th Annual Conferenceon Taxation, National Tax Association (Nov. 12, 1996); Dennis R. Capozza, Richard K. Green, andPatric H. Hendershott, “Taxes, Mortgage Borrowing and Residential Land Prices,” in Henry J. Aaronand William G. Gale (eds.), Economic Effects of Fundamental Tax Reform (Brookings InstitutionPress: Washington, D.C., 1996); Richard K. Green and Kerry D. Vandell, Giving Households Credit: HowChanges in the Tax Code Could Promote Homeownership, Working Paper, Center for Urban LandEconomics Research, U. of Wisconsin-Madison (Jan. 27, 1998); Todd M. Sinai, “The Effect of TaxReform on the Owner-Occupied Housing Market,” Ph.D. Dissertation, Massachusetts Institute ofTechnology (June 1997); Todd Sinai, “Taxation, User Cost, Household Mobility Decisions,” WorkingPaper, Wharton School, U. of Pennsylvania (Dec. 1997).


Appendix I



However, there is no consensus among researchers on the magnitude ofthese effects.

Issue: Do federal estate taxes encourage the conversion of farmland that islocated near urban areas?

Research Results: Some supporters of special treatment for qualified family-owned businessinterests and qualified conservation easements believe that recent taxchanges encourage the continued operation of family farms and are likelyto increase donations of land for conservation purposes. A study by USDA’sEconomic Research Service provides some support for such claims. Thestudy notes that the new exclusion for qualified family-owned businesses“. . . should reduce, if not eliminate, the need to sell farm assets to payFederal estate taxes. . . .” 56 The same study notes that relatively fewlandowners would benefit from the exclusion for land subject toconservation easements.

Issue: Does the literature mention other tax provisions that can influence “urbansprawl?”

Research Results: The literature also addresses the effect of changes in employer-paidparking benefits. Section 132(f) of the Internal Revenue Code allowsemployers to exclude from the income of their employees the value ofemployer-provided parking up to $175 per month in 1999. TheEnvironmental and Energy Study Institute contends that tax provisionsthat favor driving to work contribute to traffic congestion, pollution, andother public costs associated with automobile use.57 While some studiesindicate that employer-paid parking, employer-provided incentives forridesharing, and high-occupancy-vehicle lanes may have a large effect onthe probability that employees will drive to work alone,58 another source

56James Monke and Ron Durst, The Taxpayer Relief Act of 1997: Provisions for Farmers and RuralCommunities, USDA, Economic Research Service, Agriculture Economic Report No. 764 (July 1998),p. 18.

57See footnote 54.

58David Brownstone and Thomas F. Golob, “The Effectiveness of Ridesharing Incentives:Discrete-Choice Models of Commuting in Southern California,” Regional Science and UrbanEconomics, Vol. 22 (1992), pp. 5-24; Richard W. Willson, “Estimating the Travel and Parking DemandEffects of Employer-paid Parking,” Regional Science and Urban Economics, Vol. 22 (1992), pp.133-145.


Appendix I



on commuting incentives notes that factors other than commuting costsare more important in explaining patterns of commuting.59 Section 132(f)of the Internal Revenue Code also allows employers to exclude from theincome of their employees the value of employer-provided transit passesand transportation in commuter highway vehicles up to an aggregate of$65 per month in 1999. An IRS official noted that this multiple ridershipprovision could have the potential to decrease the incentive to commutealone.

Transportation

Issue: Do federal transportation programs encourage “urban sprawl” throughthe construction of new highways rather than the maintenance of existinghighway systems?

Research Results: The research we reviewed did not focus on whether federal programsencourage new construction at the expense of maintaining or preservingsystems. The research did support the conclusion that, historically,interstate highways improved access to developable land on the urbanfringe, supporting dispersed, low-density development. This phenomenonoriginated with the passage of the Federal-Aid Highway Act of 1956,according to the Transportation Research Board. The Interstate HighwaySystem is about 100 percent complete, and the federal share of annualhighway expenditures is about 21 percent, though the federal share ofannual highway capital outlays has been between 41 and 46 percent since1987. More recently, quantitative research data were collected on theimpact of specific transportation investments on the physical developmentof metropolitan areas. One study of areas with and without beltways haddifficulty deducing any effect of beltways on central city populations.Another study analyzed the changes in residential and commercialdevelopment in certain California areas and found a strong relationshipbetween expanded highway capacity and increased residentialconstruction. The study did not determine whether there was a shift indevelopment from other parts of the region. The Transportation ResearchBoard suggests that even with sophisticated statistical techniques,cause-and-effect relationships are difficult to distinguish. Moreover,

59Genevieve Giuliano and Kenneth A. Small, “Is the Journey to Work Explained by Urban Structure?”Urban Studies, Vol. 30, No. 9 (Nov. 1993), pp. 1485-1500.


Appendix I



transportation investments may affect development for many decades, butmost studies examine only short-term consequences.

As shown in figure I.1, from fiscal year 1992 through fiscal year 1997, mostfederal highway funds were obligated for system preservation projects.Although the proportions of obligations were relatively constant for allcategories, the percentage of federal funds obligated for new routes andbridges decreased slightly while the percentage obligated for systemenhancements increased by about 6 percent. Figure I.1 representsfederal-aid highway projects under way. These projects account fortwo-thirds of the total federal obligations for highway improvements.Figure I.1 also shows that over the 6-year period, obligations were asfollows: $8.7 billion for new routes and bridges, $16.2 billion for capacityadditions, $36.8 billion for system preservation, and $12.3 billion forsystem enhancements.


Appendix I



Figure I.1: Obligation of Federal Funds for Highway Improvements, Fiscal Years 1992-97

8

7

6

5

4

3

2

1

0

System enhancements

System preservation

Capacity additions

New routes and new bridges

1992

Dollars in billions

1993 1994 1995 1996 1997

New routes and new bridges—construction of new roads and bridges that do not replace orrelocate existing roads or bridges; Capacity additions—relocation, major widening, andreconstruction—added capacity; System preservation—minor widening, restoration andrehabilitation, reconstruction—no added capacity, bridge replacement, major bridgerehabilitation; and minor bridge rehabilitation; system enhancements—safety/traffic/traffic systemmanagement, and environmentally related projects.

Note: Dollars are in constant billions.

Source: Federal Highway Administration’s Fiscal Management Information System.

Researchers such as Kenneth Jackson, David Rusk, and the GrowthManagement Planning and Research Clearinghouse have concluded thathighway capacity expansion projects contributed to “urban sprawl.” Inaddition, according to the Transportation Research Board, most expansionof road capacity is taking place at the urban fringe.60 However, the lack of

60Expanding Metropolitan Highways: Implications for Air Quality and Energy Use, National ResearchCouncil, Transportation Research Board, Special Report 245 (1995), p. 194.


Appendix I



a specific geographic designation for suburban areas makes it difficult tocapture spending in these areas. For example, one study madeassumptions about federal highway data and concluded, as shown in tableI.2, that nonurbanized areas—defined as small towns and low-densitysuburbs—received a disproportionate amount of federal roadway funds.61

Federal Highway Administration officials said their reporting systemreflects federal spending by the legislated federal-aid designations—rural,urban, small urban, and urbanized—and cannot identify spending insuburban areas because suburban development can occur in any of thepopulation areas. For instance, federal highway expenditure data areassociated with two types of communities—urban (those with apopulation of more than 5,000) or rural (those with a population of up to4,999)—making it difficult to distinguish spending in suburban areas. Thestates report highway expenditure data to the Department ofTransportation in the aggregate—combining funding and transfers forfederal funding, according to Federal Highway Administration officials.

Table I.2: Analysis of Federal HighwaySpending for Fiscal Year 1995 Percentage of

roadway fundsreceived

Percentage ofnation’s

populationAmount received

per capita

Urbanizeda 46 64 $54.25

Nonurbanized b 14 9 $115.11

Rural c 39 28 $98.01aPopulation is equal to or greater than 50,000.

bPopulation is between 5,000 and 49,999. The Surface Transportation Policy Project considersthese areas as small towns and low-density suburbs.

cPopulation is equal to or fewer than 4,999.

Source: Getting a Fair Share: An Analysis of Federal Transportation Spending, SurfaceTransportation Policy Project (1996).

Utility Pricing

Issue: Do Federal energy providers encourage suburban development throughtheir rate structure?

61Getting a Fair Share: An Analysis of Federal Transportation Spending, Surface Transportation PolicyProject (1996).


Appendix I



Research Results: Our review identified very little research on the impact of utility rates andcosts on suburban development. A study on the costs of urban growth inOregon communities examines power generation costs and suggests thatthe costs of growth-related investments in electric power generation aredistributed among all ratepayers through their utility bills. 62 The studycriticizes this form of pricing—on an “average cost basis”—becausesuburban developments do not pay for the full cost of receiving electricity.The study argues that many communities subsidize urban growth byrecovering only a fraction of their costs for new development, includingthose for utility infrastructure. Another study estimates the costs of basicpublic facilities and infrastructure associated with population growth for730 U.S. cities and towns.63 The study acknowledges the difficulty ofdistinguishing growth-related costs from other public-sector costs.

The federal government has played a significant role in the development ofelectricity markets. Since the New Deal, the federal government hasestablished about 130 water projects that—in addition to promotingagriculture, flood control, navigation, and other activities—produceelectric power. To provide this power to large portions of rural America,the government also created five power marketing administrations, alongwith the Tennessee Valley Authority.64 The Tennessee Valley Authority is amultipurpose independent federal corporation, which generates andmarkets its own power. In addition, the government made financingavailable to rural utilities to assist them in building and maintainingelectricity distribution systems that provide electricity to rural areasthrough USDA’s Rural Utilities Service. In 1996, the power marketingadministrations and the Tennessee Valley Authority provided about10 percent of the nation’s electricity supply.65

The power marketing administrations, created between 1937 and 1977, selland transmit power generated at federal facilities operated primarily bythe Department of the Interior’s Bureau of Reclamation and the U.S. ArmyCorps of Engineers. The power marketing administrations’ mission is tomarket federal power in a manner that encourages the most widespreaduse at the lowest possible rates consistent with sound business practices.

62Eben Fodor, The Cost of Growth in Oregon: 1998 Report, Fodor and Associates (Oct. 1998).

63Beyond Sprawl: The Cost of Population Growth to Local Communities, Carrying Capacity Network(Dec. 1998).

64One power marketing administration, the Alaska Power Administration, was divested in 1997 and1998.

65Federal Power: Options for Selected Power Marketing Administrations’ Role in a ChangingElectricity Industry (GAO/RCED-98-43, Mar. 6, 1998).


Appendix I



They generally sell this power in wholesale markets, mostly to publiclyand cooperatively owned utilities that, in turn, sell power to end-use(retail) consumers. Each administration has its own specific geographicboundaries. Together, the power marketing administrations and theTennessee Valley Authority currently market power within 33 states.

The power marketing administrations are generally required to recover allcosts incurred as a result of producing, transmitting, and marketing power,including the costs of repaying the federal investment in the powergenerating facilities and other debt, with interest. However, we recentlyconcluded that the power marketing administrations are not recoveringthrough their electricity rates all of the power-related costs incurred by thefederal government.66 In addition, certain nonpower costs are allocated topower revenues for repayment. For example, under the concept ofaid-to-irrigation, revenues earned from the sale of power are supposed torepay billions of federal dollars invested in irrigation facilities that theSecretary of the Interior believes irrigators will be unable to repay. TheFederal Energy Regulatory Commission reviews the rates charged by thepower marketing administrations. From 1990 through 1995, the powermarketing administrations sold wholesale power at average rates thatwere 40 to 50 percent below those charged by nonfederal utilities.67, 68 Inthe recent past, however, the Bonneville Power Administration’s rateswere at or above market rates.

The largest federal power producer is the Tennessee Valley Authority. Bysome measures, it is the largest utility in the nation. Providing about5 percent of the nation’s power, it generates its own power and markets itin wholesale markets, as well as directly to large industrial customers. TheTennessee Valley Authority is required by law to set rates so that powerrevenues cover all operating expenses, including depreciation andamortization. According to recent GAO work, the Tennessee ValleyAuthority was generally recovering all power-related costs incurred by thefederal government through its rates. The Tennessee Valley Authority alsoapproves the retail rates charged by the 159 municipal and cooperativeutilities that are its primary customers. The power program is by far theTennessee Valley Authority’s largest activity. Unlike the rates of otherutilities and the power marketing administrations, the Tennessee Valley

66Federal Electricity Activities: The Federal Government’s Net Cost and Potential for Future Losses,Vols. 1 and 2 (GAO/AIMD-97-110 and 110A, Sept. 19, 1997).

67Federal Power: Regional Effects of Changes in PMAs’ Rates (GAO/RCED-99-15, Nov. 16, 1998).

68Federal Power: PMA Rate Impacts, by Service Area (GAO/RCED-99-55, Jan. 28, 1999).


Appendix I



Authority’s power rates are not subject to review and approval by statepublic utility commissioners or the Federal Energy RegulatoryCommission. Instead, all authority over the Tennessee Valley Authority’soperations—including the sole authority to set wholesale power rates andapprove the retail rates charged to distributors—is vested in athree-member board of directors.

In addition to authorizing the sale of federal power, the Congress passedlaws to encourage the development of nonfederal power systems.Investor-owned utilities were historically reluctant to serve sparselypopulated areas because of the heavy capital costs involved in installingpower systems that serve relatively few customers. As a result, in 1935,scarcely 1 in 10 farm households in the United States had electricity. TheRural Electrification Act of 1936 authorized the Rural ElectrificationAdministration (now the Rural Utilities Service) to provide loans and loanguarantees to organizations that generate, transmit, and/or distributeelectricity to small communities, farms, and persons in rural areas. Fromfiscal year 1992 through fiscal year 1996, the Rural Utilities Service madeor guaranteed 880 loans to rural utilities for capital expenditures generallyrelated to improving systems and extending electric service to newconsumers. Some of these systems buy power from the power marketingadministrations. According to recent GAO work, the Rural Utilities Serviceis not recovering all of the federal government’s costs through its loanrates.

Water-SewerInfrastructure

Issue: To what extent do federal water-sewer programs tend to support thebuilding of new infrastructure rather than the operation, maintenance, andupgrading of existing infrastructure?

Research Results: Our search of the literature and interviews with agency officials and tradeassociations disclosed little evidence linking federal domestic assistancefor municipal water and sewer systems to “urban sprawl.” Three studiesrelated federal spending for water or sewer systems to growth-relatedeffects, either directly or indirectly, but not to “urban sprawl.” One studysuggested that larger public infrastructure stocks in central cities,


Appendix I



including state and federally aided sewer systems, have a positive effect onsuburban land values.69 Another study—an evaluation, sponsored by theEconomic Development Administration (EDA), of 203 public worksprojects that received a closeout payment in fiscal year 1990—describesover a dozen water/sewer projects that contributed directly or indirectly tothe creation or retention of jobs in an area, additional investment, orpopulation growth.70 The third study, sponsored by HUD, describes twoinstances in which Community Development Block Grant funds, used inpart for water or sewer systems, helped to stabilize neighborhoods orreduce blight in impoverished census tracts.71 The five articles weidentified cited anecdotal evidence suggesting that “urban sprawl” hadoccurred in areas receiving assistance for water and sewer systems,particularly for the construction of new lines or extensions. However,these citations did not distinguish federal assistance from state, local,private, or other assistance.

We identified eight major72 federal domestic programs that provideassistance for new construction or construction to upgrade municipalwater and sewer systems. These programs are listed in table I.3. This tablealso shows that some of these programs maintain data on the amount offunding spent for each type of construction activity, while the otherprograms do not. We found, through interviews with agency officials, thatonly the two Community Development Block Grant programs generallyprovide funding for operations and maintenance. According to HUD

officials, the Department does not maintain data on funding for each typeof activity, such as new construction, repairs, or operations andmaintenance for the two programs. In addition, we found that USDA, HUD,EDA, and EPA either have or will have funding data distributed by thepopulation of the area receiving the assistance.73 However, the agenciesmaintain these data in different ways. Some of the variation can beattributed to the different ways the individual programs were designed.For instance, according to program officials, three of the eight programswere designed to provide assistance only for the capital costs associatedwith a system—for the costs of construction or upgrades—but not for

69Andrew F. Haughwout, “Central City Infrastructure Investment and Suburban House Values,”Regional Science and Urban Economics, Vol. 27 (1997).

70Robert W. Burchell, et al., Public Works Program: Performance Evaluation, U.S. Department ofCommerce, EDA (May 1997).

71Urban Institute, Federal Funds, Local Choices: An Evaluation of the Community Development BlockGrant Program, HUD, Office of Policy Development and Research (May 1995).

72We identified major programs as those with at least one annual funding or expenditure of about$50 million or more since fiscal year 1995 for water and sewer systems.

73Department of the Interior officials generally described the areas served by their programs’ projectsas urban or rural but did not refer to databases for this information.


Appendix I



operation and maintenance. Other programs were designed, according toprogram officials, to provide assistance to specific areas, such as ruralareas or distressed cities. Some of the variation is due to the use ofdifferent definitions. For instance, EDA characterizes areas receivingassistance as urban or rural; EPA relies on multiple population rangeswithout characterizing the ranges as urban, suburban, or rural; and USDA

provides funding only to rural populations, although its definition of“rural” differs from EDA’s. Because of this variation, it would be difficultto summarize the distribution of federal funding for water and sewersystems by the type of construction or by the location (urban, suburban,or rural) of the systems.


Appendix I



Table I.3: Availability of AggregateFunding Data for Major Federal Waterand Sewer Programs, Distributed byType of Activity Agency and program New construction

Construction toupgrade an

existing system a

Variedconstruction

activity b

USDA, Rural Utilities Service

Water and Waste DisposalLoans and Grants X X

Department of Commerce, EDA

Public Works X X X

EPA

Capitalization Grants forState Revolving Funds X X X

Capitalization Grants forDrinking Water StateRevolving Fund c c c

HUD, Office of Community Planning and Development

Community DevelopmentBlock Grants/ EntitlementProgram X

Community DevelopmentBlock Grants/StateProgram X

Department of the Interior, Bureau of Reclamation

Title XVI WaterReclamation and ReuseProgram X

Appropriated Municipal,Rural and Industrial WaterPrograms in North andSouth Dakota XaThis column includes data for such upgrading activities as renovation, rehabilitation, andreplacement.

bThis column includes data for both new construction and upgrade activities.

cAccording to an EPA official, data are not currently available for this new program.

It is also difficult to summarize agency officials’ views on how the fundingfor these systems influences growth. For instance, some officials identifieda past or present influence on growth. An EDA official recognized thatsignificant growth in some counties had been made possible by largewater and sewer system projects that the agency assisted in the late 1960sand early to mid-1970s. He believes that assisted projects are now, for themost part, so much smaller in scope that he did not think they wouldcontribute significantly to “urban sprawl.” HUD officials indicated that


Appendix I



funding for a water or sewer line in a rural area, provided under theCommunity Development Block Grant State Program, could not help butsupport growth. However, the officials indicated that funding fordistressed cities, provided under the Community Development BlockGrant Entitlement Program, would be supporting redevelopment ratherthan growth.

Other officials indicated that the water or sewer projects allow for futurepopulation growth. For example, according to the USDA official, projectsfunded through the Water and Waste Disposal program are designed toserve the existing population, as well as the projected growth inpopulation, as much as 100 percent, over the service life of the water orsewer line. EPA’s Capitalization Grants for State Revolving Funds programwill fund the replacement or major rehabilitation of an existing sewersystem only if, among other factors, the capacity of the project is equal tothe existing capacity, plus a reasonable amount for future growth. Underthe agency’s newer Capitalization Grants for Drinking Water StateRevolving Fund, expenditures for the expansion of any public watersystem in anticipation of future population growth are to be avoided.However, the program’s requirements do not preclude the use of financingfor facilities that meet the objectives of the Safe Drinking Water Act forthe population to be served by the facility over its useful life. An officialfrom the Department of the Interior’s Municipal, Rural and IndustrialAppropriated Water Programs in North and South Dakota indicated thatthe Department considers projected growth in the development of itsprojects, which are intended to provide water supply infrastructure wherenone previously existed. An official from the Department of the Interior’sWater Reclamation and Reuse Program noted that its projects, designed toextend the usefulness of water systems and increase the reliability of localwater supplies, could draw industry to areas served by the projects.

Of the officials we interviewed, only two, from EDA and HUD, were able tocite a study—one for each agency, already described—assessing thelinkage between a program’s assistance and growth-related effects, suchas job creation or neighborhood stabilization. Research on thegrowth-related effects of the agencies’ other programs may not beavailable, in part, because the programs were not designed to fosterresidential growth. The objectives for the eight programs we identifiedvaried from water reclamation and reuse to the economic development ofdistressed communities to the mitigation of health hazards. Consequently,any “urban sprawl” that occurs would be an unintended effect of theprogram’s assistance. Moreover, the USDA, Interior, and EDA officials we


Appendix I



interviewed said that three of these programs provide assistance inresponse to a need identified by the applicant or local sponsor. Accordingto HUD and EDA officials, their agencies’ programs require the formula grantapplicants to rank and describe the eligible needs that are being met by aprogram’s funding.


Appendix II

Summary of Studies on Factors Related to“Urban Sprawl”

The following table is a synthesis of alleged positive and negative effectsof sprawl found in studies reviewed by the authors of The Costs of Sprawl:Revisited.74 The alleged effects are grouped according to their potentialimpact on five areas: (1) public/private capital and operating costs,(2) transportation and travel costs, (3) land/natural habitat preservation,(4) quality of life, and (5) social issues. The table shows if there isagreement in the studies reviewed as to whether (1) development patternsbring about the alleged positive or negative impact (i.e., does thiscondition exist to a high degree?) and (2) the alleged impact—if itexists–has been significantly linked to sprawl.

Does this condition exist to a high degree? Is it strongly linked to sprawl?

Areapotentiallyaffected/allegedimpact

Generalagreement

Someagreement

No clearoutcome

Substantialdisagreement

Generalagreement

Someagreement

No clearoutcome


Public/privatecapital andoperatingcosts

Alleged negative impact

Higherinfrastructurecosts X X

Higher publicoperatingcostsa X X

Moreexpensiveprivateresidential/nonresidentialdevelopmentcosts X X

More adversepublic fiscalimpactsb X X

Higheraggregateland costs X X

Alleged positive impact

(continued)

74Robert W. Burchell, et.al. Costs of Sprawl Revisited: The Evidence of Sprawl’s Negative and PositiveImpacts, National Research Council, Transportation Research Board (Sept. 1998).


Appendix II

Summary of Studies on Factors Related to

“Urban Sprawl”



Generalagreement

Someagreement

No clearoutcome


Generalagreement

Someagreement

No clearoutcome


Lower publicoperatingcosts X X

Lessexpensiveprivateresidential andnonresidentialdevelopmentcosts X X

Fostersefficientdevelopmentof“leapfrogged”areas X X

Transportationand travelcosts


More vehiclemiles traveled X X

Longer traveltimes X X

Moreautomobiletrips X X

Higherhouseholdtransportationspending X X

Lesscost-efficientand effectivetransit X X

Higher socialcosts of travelc X X


Shortercommutingtimes X X

Lesscongestion X X

(continued)


Appendix II


“Urban Sprawl”



Generalagreement

Someagreement

No clearoutcome


Generalagreement

Someagreement

No clearoutcome


Lowergovernmentalcosts fortransportation X X

Automobilesmost efficientmode oftransportationd X X

Land/naturalhabitatpreservation


Loss ofagriculturalland X X

Reducedfarmlandproductivity X X

Reducedfarmlandviability X X

Loss of fragileenvironmentallands X X

Reducedregional openspace X X


Enhancedpersonal andpublic openspace X X

Quality of life


Aestheticallydispleasing X X

Lessenedsense ofcommunity X X

Greater stress X X

(continued)


Appendix II


“Urban Sprawl”



Generalagreement

Someagreement

No clearoutcome


Generalagreement

Someagreement

No clearoutcome


Higher energyconsumption X X

More airpollution X

X

Lessenedhistoricpreservation X X


Satisfiespreference forlow-densityliving X X

Lower crimerates X X

Reducedcosts of publicand privategoods X X

Fostersgreatereconomicwell-being X X

Social Issues


Fosterssuburbanexclusione X

X

Fosters spatialmismatchf X X

Fostersresidentialsegregation X X

Worsens cityfiscal stress X X

Worsensinner-citydeterioration X X


(continued)


Appendix II


“Urban Sprawl”



Generalagreement

Someagreement

No clearoutcome


Generalagreement

Someagreement

No clearoutcome


Fosterslocalizedland-usedecisions X X

Enhancesmunicipaldiversity andchoice X X

aPublic operating costs include public workers’ salaries and benefits; normal expenditures forsupplies, repairs, and replacement items; and debt service for capital facilities.

aUnplanned growth is believed to result in greater cost to municipalities.

cThese social costs include air and water pollution, noise, and the costs of parking and accidentsthat are not paid by transportation users.

dAutomobiles are the most efficient means of travel when development is dispersed.

eSuburban exclusionary zoning increases the concentration of low-income households in certainneighborhoods.

fA spatial mismatch occurs when most new jobs are created in the suburbs and many low-skilledworkers live in inner-city neighborhoods; this mismatch aggravates the high rates ofunemployment in inner-city neighborhoods.


Appendix III

Comments From the Department ofCommerce

Note: GAO commentssupplementing those in thereport text appear at theend of this appendix.


Appendix III

Comments From the Department of

Commerce

See comment 1.

See comment 2.Now on p. 6.

See comment 3.Now on p. 19.


Appendix III


Commerce

See comment 4.Now on page 54.


Appendix III


Commerce

The following are GAO’s comments on the Department of Commerce’sletter dated April 5, 1999.

GAO’s Comments 1. Identifying whether agencies had the resources to conduct analyses onthe impact of federal investments was outside the scope of this report.

2. A more in-depth look at the tools and policies developed at the locallevel to manage growth is planned for our next report on “urban sprawl.”

3. Because the Economic Development Administration’s (EDA) localplanning process was not cited as an example of regionalism in theliterature we reviewed or by the officials we interviewed, we did notreview the process; therefore, we did not include the process as anexample in the report.

4. We have underlined EDA in table I.3. We did not include EDA’s EconomicAdjustment Program in the table because it did not meet our criteria for amajor program. We identified a major program as one with at least oneannual funding or expenditure of about $50 million or more since fiscalyear 1995 for water and sewer systems.


Appendix IV

Comments From the EnvironmentalProtection Agency


See comment 1.


Appendix IV

Comments From the Environmental

Protection Agency

See comment 2.

See comment 3.

See comment 4.

See comment 5.

See comment 6.


Appendix IV

Comments From the Environmental

Protection Agency

The following are GAO’s comments on the Environmental ProtectionAgency’s (EPA) letter dated April 1, 1999.

GAO’s Comments 1. We changed the report to make it clearer that the shortage of evidencedoes not mean that federal programs and policies do not have an impacton “urban sprawl.”

2. We agree with EPA that there is enough research in a few federalprogram and policy areas, such as transportation, to make strongerstatements about the federal impact on “urban sprawl.” However, we didnot revise the report as EPA suggested. The lack of research on somefederal polices makes the suggestion about grouping the similar policiesinto one section impractical. Furthermore, creating such a section in thereport might lead readers to assume that the other policies do notcontribute to lower-density development when, in reality, research doesnot exist to prove the point either way.

3. We disagree with EPA that there is widespread agreement in the researchcommunity on the impact of outward growth. As summarized in appendixII, a synthesis of available literature found very little agreement on thealleged positive and negative effects of “urban sprawl.” Because ourintent was to provide a balanced discussion of the positive and negativeimplications of “urban sprawl” cited by experts on both sides of the issue,we revised the language in the report to make it clear that the statementsabout positive and negative effects represent the views of experts.

4. We agree with EPA that affordability is not inherent to “urban sprawl”and that alternatives, such as clustering housing, can also increase theaffordability of housing. However, experts believe that a positive effect of“urban sprawl” is that housing costs are lower in the outer-ring suburbs.Because our intent was to cite the views of experts, we did not revise thereport.

5. In response to EPA’s comments, we deleted the last sentence in theobservations section.

6. We changed the report’s title to Extent of Federal Influence on “UrbanSprawl” Is Unclear.


Appendix V

Comments From the General ServicesAdministration


See comment 1.


Appendix V

Comments From the General Services

Administration

See comment 2.


Appendix V


Administration


Appendix V


Administration

The following are GAO’s comments on the General ServicesAdministration’s (GSA) letter dated April 2, 1999.

GAO’s Comments 1. We considered the additional information provided by GSA on itsimplementation of Executive Orders 12072 and 13006 but did not makeany changes to the report because the report contains sufficientinformation on these activities.

2. In response to the additional information provided by GSA on its role inthe Federal Livability Communities Agenda, we added a reference to GSA’sGood Neighbor Program in appendix I of the report.


Appendix VI

Major Contributors to This Report

Housing andCommunityDevelopment—Atlanta Field Office

Signora May, Evaluator-in-ChargeLisa MoorePaige Smith

Housing andCommunityDevelopment—Resources,Community, andEconomicDevelopmentDivision, Washington,D.C.

Susan Campbell, Assistant DirectorPatricia Farrell DonahueDonna LucasPatrick ValentineJames Vitarello

Office of GeneralCounsel

John McGrail


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